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It's not the first oil boom to hit North Dakota, but it's undoubtedly the biggest. North Dakota has quickly become one of the largest oil-producing states in the country. The Bakken has brought thousands of people to North Dakota and billions of dollars in state revenue. But it's also brought its share of headaches for those living in oil country. Home construction can't keep up with the rapid growth in population. Crimes, accidents and arrests are at an all-time high in western North Dakota. Small cities that were once off the grid are making national headlines as they face challenges they've never had to deal with before.
Clip: Oil Production Expected to Keep Growing
Michelle San Miguel
Oil country has changed drastically in just the past year. Every month the state is producing more oil and there's no sign of it slowing down. 2011 was a record-setting year for the oil industry and 2012 is on pace to break many of those records.
"We've known about it for 60 years, but it's only in the last 10 that we've figured out how to produce it," said Lynn Helms, director of the North Dakota Department of Mineral Resources.
Hydraulic fracturing has been around for 60-something years, but it wasn't until engineers learned how to insert wells horizontally underground that the Bakken boom was born.
North Dakota is producing upwards of 535,000 barrels of oil a day. The latest production numbers show the state's on track to pass California as the third largest oil-producing state in the country and eventually surpass Alaska.
"I think our expectation is to move into number two and not be far behind Texas, but we really don't expect to out-produce Texas," Helms said.
About 2,000 wells are being drilled every year. The industry expects to keep that pace up for 18 to 20 years. But just because that many wells are being drilled doesn't mean they're all being fracked right away. Last December there were close to 800 idle wells in the state waiting to be fracked because there simply aren't enough frack crews.
"What you've seen is industry has pretty much held that rig count around 200 for the last six months and it's made a big difference and a lot of that is to really allow the infrastructure to catch up. A lot of it is because you just don't really have the workforce and you don't have the facilities to house people," said Ron Ness, president of the North Dakota Petroleum Council.
While oil counties are thankful for that, many local officials would like to see oil production slow down.
"You know if there was 100 rigs we'd be happy. We'd still be busy," said Williston Mayor Ward Koeser. "The economy would be strong, you know, we just wouldn't have this tremendous stress that we're facing right now, but we deal with the cards that were given us."
Williams County Sheriff Scott Busching said, "I would like to see them limit the permits. And if not limit the permits, at least come out here and look at where they're putting them."
Another 25 to 30 rigs are expected to be added this year- a slower increase than in previous years. Still, oil companies need about 400 more people to work on fracking to keep up with drilling.
The state says the Bakken contains somewhere between seven to nine billion barrels of recoverable oil, but some optimists say there's actually three times that amount.
But all of that could be put on hold if federal regulators impose a moratorium on fracking. During November's special session, legislators voted to pass a bill that sets aside a million dollars for the state to use to sue the Environmental Protection Agency in the event that federal regulators decide to manage the state's hydraulic fracturing.
"If the federal government were to put a moratorium on fracking, every American would see an immediate reaction to the price they pay for energy and I can't imagine that on a nationwide basis that we could shut down America's oil and gas industry," Ness said.
Helms said, "We're every day thinking about the possibility that federal regulators would respond to the fear as opposed to the facts."
And if they did, it would put the breaks on a big source of state revenue. The state initially projected it would bring in more than two billion dollars in oil and gas tax revenue this session. Now, that number is forecasted to be somewhere between three to three and a half billion dollars. Some of the money from the gross production tax, for instance, goes to oil-producing counties.
"Once the county gets it, they have to split it up between the county, the city and the school district," said North Dakota Tax Commissioner Cory Fong.
In 2009, the legislature readjusted the tax formula for the gross production tax so counties would receive more money. But as it stands now, oil counties receive less money as they produce more oil while the state gets more money the more the oil counties produce.
"It is a state resource, but we are bearing some costs for that state resource that the other counties aren't- in roads, in social services, in schools and things like that," Busching said.
Fong said, "There's a lot of dollars that go back to the local governments for infrastructure. Some of them, and I would probably agree, probably they need to see a little bit more of that."
Oil workers will be seeing more OSHA inspections this year. "We've at least doubled that already and we're only about five months in to the fiscal year," said Eric Brooks, OSHA's assistant area director in Bismarck. "I would expect us to triple the number of inspections that we've done out there."
OSHA says that's in response to the increased activity in the oil fields. But there are also more deaths. Since October of 2010, OSHA's Bismarck officers have investigated 11 deaths in the oil and gas industries.
Brooks said, "Right now we're on pace to exceed the number of fatalities, particularly related to oil and gas that we've ever inspected."
Ultimately, Brooks says oil workers need to research the company they work for and make sure it has a good safety record.
State oil regulators say they hope Bakken oil will eventually displace crude from OPEC countries, like Ecuador, which the state already out-produces. North Dakota is expected to produce close to a million barrels of oil every day in about seven years.